Fidelity National Information Services Inc.

The stable outlook reflects our expectation that FIS will sustain revenue growth through 2022 and that growing free cash flow and EBITDA margins will enable the company to expand shareholder returns without raising leverage back over 3.0x. We could lower the rating if FIS pursues substantial leveraged acquisitions or shareholder returns that would raise leverage over 3.0x on a sustained basis. Although FIS has a track record of deleveraging after sizable acquisitions, if it established a pattern of increasing debt shortly after deleveraging such that leverage rarely remained under 3.0x, we could also consider a downgrade. Although less likely in our view, an unexpected rapid economic downturn that raised leverage meaningfully could also lead to a downgrade. Although unlikely over

...Substantial scale, diversified clients, and strong recurring revenues provide a defensible market position, but we do expect moderate volatility from macroeconomic-sensitive processing businesses. Fidelity National Information Services Inc. (FIS) benefits from broad and diversified revenue streams across its three segments, which--combined with low customer concentration and a high share of recurring revenues--provide a highly defensible market position in financial technology and payment processing. The company's expansive banking and capital markets technology solutions and its high proportion of mission-critical and recurring services provided to long-term clients have helped stabilize operating performance through a challenging 2020. The firm's merchant processing segment, obtained through the acquisition of Worldpay in 2019, has substantial scale and a good competitive position relative to peers, but S&P Global Ratings expects this business to remain more exposed to macroeconomic volatility...

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